Industry leaders delved into housing policy, technology, employee and resident satisfaction, and the lending environment at Multifamily Executive’s annual Leadership Summit in Vail, Colorado, in early March.
Here are some of the key takeaways from the event:
1. New Administration
National Multifamily Housing Council (NMHC) president Sharon Wilson Génosaid the industry is in a wait-and-see mode when it comes to the new Trump administration.
“We are seeing a lot of activity that is very disruptive, without a doubt. But not all of that has actually played out,” she told attendees. She noted the president on Jan. 20 announced his top agenda items for his second administration and on that list was creating new housing supply and lowering the cost of housing.
“Anything that comes out, be that tariffs, immigration policies, or anything else, we hope will get viewed through that lens of the creation of housing supply and the impacts those policies will have on housing supply,” she said. “We are going to likely see some short-term disruption and pain, but potentially the opportunity to walk some of that back if they can see that they are truly impacting the reality of their priorities.”
She added one disruption that has played out the most so far has been the riffs at the Department of Housing and Urban Development (HUD). “In addition to the riffs, there have been folks taking the fork in the road—retirement and other things. HUD has one of the longest tenured workforces in the entire federal government. A number of people who are taking those retirements really do have an impact on the work getting done at HUD. Anyone using HUD programs, it’s a complicated situation right now.”
2. Workforce Watch
With the Trump administration encouraging investments in U.S. manufacturing, Sharon Karaffa, president of multifamily debt and structured finance at Newmark, said the industry needs to be thinking about workforce housing in areas where plants are planned. “I think developing workforce housing will be interesting in the next couple of years,” she noted.
3. GSE Update
There has been a lot of early discussion about privatizing government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. Industry leaders shared they don’t expect any disruption in the near term. “Even if there is a movement by the administration to make that happen, I would not worry about that for quite a while,” said Dave Borsos, NMHC’s vice president of capital markets, adding that he believes the administration understands the importance of Fannie Mae and Freddie Mac backing half of the nation’s outstanding mortgage debt.
Karaffa also added there’s a possibility the GSEs will get back to a point where they hit their lending caps set by the Federal Housing Finance Agency.
4. Rent Control
Wilson Géno said rent control continues to be an issue across states and localities across the nation. Last year, NMHC partnered with National Apartment Association, Mortgage Bankers Association, National Association of Home Builders, and National Association of Realtors to form the Housing Solutions Coalition, a 501(c)(4) education advocacy group to put money into states and localities where the rent control issue is coming up. It has been focusing on Minnesota, Colorado, and Washington, and will be dropping into Nevada next.
“A lot of this is getting to the point where we need to win the hearts and minds of voters as well as give local legislators and country legislators the tools they need to tell their constituents why they don’t think rent control is a good solution and what are other solutions that are better.”
5. Deal Activity
Karaffa noted the industry has accepted that interest rates are going to be higher for longer, and it’s going to be a slow climb out. “Things will come back in the second half of the year, and we’ve been saying that for a few years. I think the feeling now is that there is not going to be this one extra special thing,” she said. “It’s going to be a slow climb out, and that will be from rent growth in markets where peak supply is behind them or soon will be behind them. As rent growth starts to tip up again, I think this will help us get out of this situation. It’s not going to be rates dropping, it’s going to be a slow slog.”
6. Debt Availability
“There are a lot of people out there with a lot of money to put out to work. Folks who have been on the sidelines for the past few years are coming back in the market,” said Tim Smits, a director at Lument. “We’re seeing a lot of banks coming back into the market, we are seeing debt funds and CMBS having a resurgence. The agencies, in my opinion, are still going to be the major market player going into 2025.”
Smits added the good news is there’s going to be a lot of competition on the debt side this year. “I think a lot of different lenders are going to get creative to make the deals work. We see good things ahead, although tougher on us, but competition is healthy.”
7. AI Update
When it comes to artificial intelligence (AI), Jennifer Staciokas, president of Western Wealth Communities and vice president of people and technology at Western Wealth Capital, advised: “It’s not set it and forget it.”
Once a bot is unable to answer a question, the property manager or assistant must be able to step in quickly. “If there’s a two-hour delay to get a response, you lose a customer,” she said. “There is still a lot of heavy lifting to make sure it’s successful.”
Rukevbe Esi, senior vice president and chief digital officer at AvalonBay Communities noted the biggest impact from AI for the company has been on the leasing side. “From tour booking, we have an agent that does the booking and follows up with the prospect up until they show up to tour. While they are touring, if they have questions about the asset or anything associated with community, they are engaging with a bot. That frees up our associates. When there are specific questions or problems, they will be connected to an associate. That’s huge for our business,” he said.
Scott Pechersky, chief technology officer at RPM Living, agreed. “That’s probably the closest to a game-changer. But even then, we found at the very beginning that you need to have your sites understand that they need to read the responses to help train this model,” he said. “It’s not going to work right out of the box perfectly. There is a commitment from our on-site teams to help train the model.”
8. New Tech Advice
When looking to swap out technology or add to the tech stack, Pechersky said he’s passionate about not quickly moving to the next shiny toy. “My advice would be with a lot of the software you have, you might need to work closer with your partner instead of swapping out for new technology.”
Staciokas added it’s also about really understanding the problem you’re solving for and what success looks like. “What are the metrics that we’re looking to achieve with a new pilot or new technology?” she noted. “It’s very disurptive to our on-site teams when we have changes to technology.”
Esi agreed. “Are you clear on your problem? What’s your hypothesis? What does success look like? Then determine what the best technology would be to achieve that. Don’t use technology just because it’s there,” he added. “There are some things that are probably best done in an analog fashion.”
9. Recruitment and Retention
It’s all-hands-on-deck when it comes to recruitment for multifamily on-site teams, with speakers noting they look to colleges, vocational schools, third-party recruiters, in-house recruiters, and organic referrals.
“We look everywhere because that’s the need we have,” said Cindy Clare, chief operating officer at Bell Partners. “We’re really starting to bring people in and train them ourselves. The truth is it has gotten much harder to be an on-site manager, leasing person, or in maintenance because post-COVID people are just being mean, we’re just not as nice. … It’s not just the technical skills, but it’s the other skills dealing with people.”
Ronan Kearney, senior vice president and head of property management at Southern Land Co., added: “Something we try to solve for in the recruiting process is the EQ (emotional intelligence). These jobs are incredibly demanding. You need some financial acumen, you need emergency readiness, you need a high degree of people skills, and it’s just every day of the year. I think that X factor is people who have some warmth and some empathy, and that’s tough to solve for during the recruiting process.”
Stephanie Brock, managing partner of property management at Waterton, noted the firm struggles with the service side and also looks at additional learning and training.
“These roles are 24/7, they are on call, and it’s hard. They don’t have the skill sets,” she said. She said Waterton has been looking at two things to help. “In Denver, two high schools closest to us offer a program called apartment maintenance. We have a desperate need across the country, you see how many units there are. There’s some participation in that, but it’s not as much as you would hope for. That’s an avenue we can go to,” she said. “We also have a platform where our service team has an online learning channel where they can find 20-minute videos to learn how to sheetrock and learn how to fix a toilet. They come to us brand new, and if you try to move them up into a supervisor position, they really don’t have the skill set yet. We’ve got to give them that education opportunity.”
10. Getting the Message Out
Wilson Géno encouraged the industry to do more to connect the dots of what the industry does and why publicly. “We build the homes where people build their lives,” she said. “I don’t think there is a whole lot better occupation you can have.”
11. Parting Leadership Advice
“We’re all very busy and our teams are very busy, but show up. Show up in local community meetings—not just with yourselves, but with your neighbors and friends. Show up with your teams. Partner with local community organizations like YIMBY action groups that are locally springing up in many places and other employers in your communities who need housing for teachers, for health care workers, and for others. Partner with them and ask them to come with you to tell the stories at the state and local level and how critically important building these homes are for the future of our communities and the future of our country. Keep talking about what you do.” —Wilson Géno
“With the volatility that is going on, with the changes that are coming down both politically and economically, we all have to remain very nimble. If you feel that you have a nimble organization, that you are a nimble professional, I would say plan to be double that in your agility in the next five years' time. That’s going to be critical in your success and our industry’s success.” —James Schloemer, CEO and chairman, Continental Properties
“We’re in a long-term asset class. Over long periods of time, these assets appreciate meaningfully, and they always appreciate beyond the prior peak. Will we ever get back to fourth quarter 2021 values in Phoenix or Dallas? I promise you we will; I can’t tell you when, but it just has happened in every cycle. Be patient. I would also follow the laws of our mathematics and underwriting. Don’t assume cap rate compression when you’re buying a deal. Try to get to positive leverage in a reasonable time period. Your returns should be a reasonable premium above risk-free returns. I see sometimes peers or people who work at our company who try to defy those basic rules. And that’s not going to work in the long run.” —David Schwartz, CEO and chairman, Waterton
“Keep in mind that everybody in our business is younger than we are. So they haven’t seen the cycle that we have seen before. Our perseverance will help them get through this. It’s a great time to train and retrain your employees. They might not be as busy today as they were when things were flying, but it’s back to the basics knowing how to do things and the need to sell. [Renters] are not just coming to you anymore, you need to really work it. And last, I would buy everything I can, I would build everything I can, and I would finance anything I can because it’s a cyclical business. People are saying don’t do it now. We’re all smart enough to know, that’s when you do it.” —Jim Butz, CEO and co-founder, Jefferson Apartment Group
